A $550 million portfolio of some of downtown Denver's highest-profile properties, including the 56-story Republic Plaza, is on the market, according to sources.Toronto-based Brookfield Properties is expected to sell the 1.2 million-square-foot Republic Plaza - Denver's tallest high-rise - at 370 17th St. for $300 per square foot or more, fetching at least $360 million.
That would shatter the record for a total sales price as well as a per-square-foot price for a multitenant high-rise office building.
In addition to Republic Plaza, Brookfield also reportedly plans to offer for sale 1.3 million square feet of Denver properties, which include the two World Trade Center buildings, 50 percent of the Colorado State building, a development site next to Denver Pavilions and a parking garage on Tremont Place.
Brookfield's $550 million Denver portfolio is quietly being shopped around by Los Angeles-based Secured Capital, working with Tim Richey and Mike Winn of the Denver office of Cushman & Wakefield, according to people familiar with the deal.
Neither Richey nor Jay Borzi or Steve Silk, principals at Secured Capital, could be reached Wednesday. A spokeswoman for Brookfield declined to comment.
"(Brookfield has) been talking about getting out of their secondary markets, and the only two secondary markets they have are Denver and Minneapolis," said Himalaya Jain, an analyst who follows Brookfield for Toronto-based Scotia Capital Markets. "Their core holdings are in Washington, D.C., New York, Toronto and Calgary (Alberta), so it should not be a surprise to anyone that they are selling their buildings in Denver."
He said Republic Plaza is 82.3 percent leased, which "apparently is on par with the local market" but doesn't compare with the 94 percent average vacancy rate Brookfield has in its New York holdings.
In New York, the company has about 15 million square feet in buildings, including one next to the World Trade Center site. That building, the World Financial Center, was damaged during the terrorist attacks of Sept. 11, 2001. Brookfield's total portfolio is about 44 million square feet of commercial properties.
In 1999, Chicago-based Equity Office Properties, in two transactions, paid a record $379 million for a portfolio that included the Tabor Center and the Denver Post building.
Equity Office Properties, headed by real estate investor Sam Zell, is seen as one of a handful of companies that might go after Republic Plaza.
Real estate experts said potential buyers also could include Beacon Properties, JP Morgan and TIAA-CREF, among others. TIAA-CREF is a large tenant in Republic Plaza and for years held the loan on the building, which opened in 1984. Foreign investors also are showing an appetite for towers in the U.S. and could help bid the price up.
Secured Capital also is listing the Wells Fargo Center, the third-tallest building downtown, sources said. The 1.2 million-square-foot Wells Fargo building at 1700 Lincoln St. is better known as the "cash register building" because of its unique design.
It is on the market for about $270 per square foot, or $324 million. Earlier this year, Maguire Properties closed on a $1.5 billion office portfolio of mostly California buildings,which included Wells Fargo properties. Maguire planned to sell off the Wells Fargo buildings because they are not a core holding.
Republic Plaza at a glance
Fifty-six story building in downtown Denver is the tallest in Colorado and the Rocky Mountain region. Some other facts:
• Year completed: 1984.
• Floors: 56.
• Height: 714 feet.
• Size: 1.239 million square feet, a significant amount of which is leased to TIAA-CREF, law firms and banks.
• Owner: Brookfield Properties.
• Of note: Owners of Denver's Hotel Teatro have plans to construct a 50-story, $350 million skyscraper that will eclipse Republic Plaza, making it Denver's new tallest building at 752 feet.
• World's largest office building: The Pentagon, with over 3.7 million square feet.
• World's largest skyscraper: Malaysia's Petronas Towers, 1,483 feet and 88 stories.
Sources: CoStar, Rocky Mountain News library
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